UPDATE 3-Japan regulator suspends BNP Paribas unit 2 weeks

* Commodities, equities derivatives business to halt trade

* Regulator says trader tried to fix share price

* BNP failed to properly respond to earlier punishment - FSA

* Shares up 2.7 percent in Paris trade

(Adds comment, detail, and background)

By David Dolan and Nathan Layne

TOKYO, Oct 23 (Reuters) - Japan's financial regulator ordered a unit of French bank BNP Paribas (BNPP.PA) to halt some of its business for two weeks as punishment for stock price fixing and providing inaccurate information about a bond deal.

BNP Paribas Securities (Japan) is to suspend all business at its equities and commodities derivatives division for the first two weeks of November, the Financial Services Agency said on Friday, the second time in a year the regulator has punished the bank.

The bank said it would replace the head of the brokerage and the head of the equities and commodities derivatives division to strengthen internal controls.

"It's not a slap on the wrist. I think it's a very clear message," said Neil Katkov, senior vice president at financial consultancy Celent.

"This a signal the FSA doesn't like what it sees and it could very easily mean this practice occurs at other firms and they are picking this as an example to send a message to the market."

The FSA said a trader in BNP's Tokyo equity and options department on one occasion sent a massive buy order for a certain stock, with the intent of fixing the price.

Officials for the regulator declined to name the stock. A source with knowledge of the matter said it was mobile phone company Softbank Corp (9984.T).

The punishment was widely expected after Japan's securities watchdog recommended action last week. [ID:nT133125]

"INADEQUATE RESPONSE"

The suspension also takes into account BNP's failure to properly respond to a separate punishment last November, the regulator said. Last year the FSA ordered BNP's Tokyo office to tighten its internal controls following a bond deal with a failed property developer. [ID:nT183381]

BNP arranged 30 billion yen ($329 million) in financing for property firm Urban Corp but the full terms were not disclosed to the market for a month, during which time Urban collapsed under $2.4 billion in debt.

As punishment for lax disclosure, BNP was ordered to submit reports to the regulator, which were later found to be incomplete and to contain false information.

"Inadequate response to administrative orders is a serious problem which hinders appropriate financial administration by the FSA," the regulator said on Friday.

The suspension of the equities and commodities derivatives division will not affect the business of other departments in Japan, BNP Paribas said. "BNP Paribas Securities Japan has been implementing measures to enhance governance and controls and further measures will be taken and reported to the FSA.".

BNP also said that Philippe Avril, general manager of its Japanese brokerage, would take over as chief country representative for Japan as of Nov. 1, replacing Yusuke Yasuda who is leaving the company.

Mike Watanabe, who joined the brokerage in 2003 from Zurich Capital Market, has been named head of equities and commodities derivatives.

BNP Paibas shares were up 2.7 percent in Paris at 1130 GMT. (Editing by Michael Watson and Dan Lalor) ($1 = 91.29 yen)